Crop insurance yet to take root
Apr 21 2017 , Chennai
Only 35 per cent of the households are aware of crop insurance, as per the Irdai survey between 2010 and 2015. The percentage of households that are aware of crop insurance is higher in rural areas (39 per cent) against urban areas (32 per cent).
Of the 4 regions, the level of awareness is highest in the west where 51 per cent of the households are aware of crop insurance. The level of awareness is higher among insured against uninsured households.
There are wide variations across states in terms awareness. In states like Himachal and Chhattisgarh, 87.5 per cent of households are aware. But in Chandigarh, Assam, Meghalaya, Mizoram, and Puducherry, less than 10 per cent of the households are aware about this insurance.
“Crop insurance in India is still nascent and experimental in terms of pricing, coverage and claim settlement. Insurance firms have their own concerns and the availability of re-insurance too is not sufficient. Insurance covers farm owners and not tenant farmers and this is a structural defect of the insurance schemes.
“But insurance coverage is improving and in 2-3 years it will become more popular,” said R Chandrasekaran, secretary general, General Insurance Council.
In case of cattle/livestock insurance, at the all-India level, only 29 per cent of rural and 28 per cent of urban households are aware. There is hardly any rural-urban difference in all the four regions about it. The level of awareness is somewhat better in the west, with 41 per cent of rural and 38 per cent of urban households reporting knowledge about it. The difference in the level of awareness between the insured and the uninsured households is also not noticeable.
While in Himachal Pradesh (81 per cent) and Chhattisgarh (72 per cent) have high percentage of awareness, in Chandigarh, MP, Assam, Bihar, Jharkhand, Meghalaya, Mizoram, Sikkim, Tripura and Puducherry, hardly any household has heard of this type of insurance. “Despite Haryana and Punjab being the agrarian states, penetration of crop insurance is very low,’ said Pushan Mahapatra, MD & CEO, SBI General Insurance.
Irdai has been trying to expand the channels, which sell crop insurance to increase its penetration in rural areas by allowing point-of-sales persons and common service centres to sell schemes.